In the last few years, virtual machines have gone from an interesting intellectual exercise and shortcut for testing software to a powerful method of optimizing the power and performance of server hardware. With everyone from Microsoft to IBM to various Linux vendors jumping on board the VM bandwagon, Apple stood alone in giving virtualization the cold shoulder: the end-user license agreements for Mac OS X were very specific: one Macintosh, one copy of the OS. All this has changed with the release of Leopard Server, which now allows virtualization. The specific phrase in the EULA is this: "You may also install and use other copies of Mac OS X Server Software on the same Apple-labeled computer, provided that you acquire an individual and valid license from Apple for each of these other copies of Mac OS X Server Software." Unfortunately for VM fans, the desktop version of Leopard does not have this wording added.

Technically, of course, it has always been possible to run the Intel release of OS X in a virtual machine: hackers had OS X 10.4 "Tiger" running under VMWare shortly after Apple released Intel-based Macintoshes. Legally, however, the EULA has always prevented any version of OS X from running under a VM. This has limited the usefulness of Apple's rack-mounted Xserve hardware. Dave Schroeder of the University of Wisconsin - Madison told TidBITS that "for a variety of reasons, some technical and some organizational, we need to have individual Xserves hosting distinct instances of Mac OS X Server. Often, these individual modern servers are greatly underutilized. With virtualization, we could more effectively manage our computing resources and combine several of these Mac OS X Server environments into virtual environments on one server."

At the moment, however, running Leopard Server in a VM will require a virtual machine environment that can support the software. Ben Rudolph, director of corporate communications for Parallels, said that his company was working closely with Apple and will make public an update that will allow Leopard Server to run "as quickly as possible." VMWare is also working to add support for OS X Server to their products.

With the change to the EULA, has Apple caught up to Microsoft in terms of the VM-ability of its operating systems? In a word, no. Microsoft updated its EULAs last month to allow unlimited copies of Windows Server 2003 R2 Datacenter and the upcoming Server 2008 Datacenter editions to run on a single server with only one license. To compare:

Operating system

Retail price

Virtualization options

Microsoft Windows Vista Home

$199

None

Microsoft Windows Vista Business

$299

One installation per license

Microsoft Windows Vista Ultimate

$399

One installation per license

Apple Mac OS X 10.5 "Leopard" Desktop

$129

None

Microsoft Server 2003 R2 Standard

$999

One installations per license

Microsoft Server 2003 R2 Enterprise

$3,999

Up to four VM installations per license

Microsoft Server 2003 R2 Datacenter

$2,999

Unlimited VM installations per license

Mac OS X 10.5 "Leopard" Server (10-client)

$499

Once installation per license

Mac OS X 10.5 "Leopard" Server (unlimited client)

$999

Once installation per license

Of course, the comparison is somewhat skewed because Apple is still primarily a hardware vendor and ties all operating sales to its own computers. Still, as TidBITS points out, if Apple sells only two extra copies of the 10-client Leopard Server for an Xserve, it makes the same amount of profit as the estimated profit (based on Apple's 33.6 percent gross margin) on selling the Xserve itself.

While virtualization isn't a big deal yet on the desktop, it's clear that its future in servers is large indeed, and if Apple wants to play in this arena, it needs to keep up with the competition. The Xserve hardware itself, which hasn't been updated since August 2006, could use some boosting as well to keep up in the VM game, such as higher bandwidth and RAM capacity. Apple may never stop being primarily a hardware company on the desktop, but in the server space, VMs are about to make the line between hardware and software companies increasingly blurred.